Fri. May 7th, 2021

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S&P Dow Jones Launches Bitcoin And Ethereum Indexes

3 min read

S&P Dow Jones Indices has launched three new cryptocurrency indices. The S&P Bitcoin Index, S&P Ethereum Index, and S&P Crypto Mega Cap Index (a combination of Bitcoin and Ethereum) will allow retail traders to easily gain exposure to these two largest cryptocurrencies by market cap.

A Move Long Overdue

The S&P Dow Jones Indices launched its first-ever crypto indexes featuring Bitcoin, and Ethereum. According to the published document detailing the methodology, the indexes include the S&P Bitcoin Index which measures the performance of Bitcoin, the S&P Ethereum Index, designed to measure the performance of Ether, and the S&P Crypto Mega Cap Index dedicated to measuring the performance of both digital currencies.

The step demonstrates how mature the digital currency ecosystem has become, with the primary goal of monitoring the success of the top digital currencies listed on exchanges around the world. The cryptocurrency indices, according to the S&P Dow Jones, use Lukka Inc., a crypto data provider, as their data source for digital asset pricing and comparison data. These figures were derived from the Lukka Prime and Lukka reference data items.

The newly introduced indexes include Bitcoin-based S&P Bitcoin Index (SPBTC), Ether-based S&P Ethereum Index (SPETH), and S&P Cryptocurrency MegaCap Index (SPCMC), which is designed to track the performance of BTC and ETH weighted by market capitalization. All three indexes are immediately available on the S&P’s website.

Ray McConville, a Spokesman for the S&P confirmed that the three indices measure price appreciation, and not the prices of the assets in themselves.

“So comparing the two indices, we can see that Bitcoin YTD has grown 95.67% in value vs. ETH, which has grown 273.72% in value YTD,” he said. “The actual index value isn’t so much as important as the change in that index value over time.”

The S&P crypto indexes are set to further normalize bitcoin and ether data for Wall Street traders eager to decipher crypto price action. The indexing is being compared to current Bloomberg and Galaxy indexes.

BTC/USD have slumped back to $54,450. Source: TradingView

Related article | Top Macro Investor Expects Bitcoin-S&P 500 Correlation to Break Down

Another Win For Crypto

The last halving case, as well as a huge inflow of funds from institutional investors, have helped Bitcoin rise dramatically in the last year. Big Wall Street companies are now pouring capital into Bitcoin and digital currencies in general, from MicroStrategy Incorporated to Square Inc. and electric automaker Tesla.

Many businesses are contributing to the development of the BTC ecosystem, including PayPal, which now facilitates Bitcoin buying and selling. eToro, a social trading site, has released an index for relevant companies that are accelerating the mainstream acceptance of bitcoin.

This comes at a time when Ethereum is gaining. On Monday, ETH added over 16% pushing the coin to a new record of slightly over $3,450.

S&P Dow Jones’ indices uses Lukka Prime Fair Market Value end-of-day price taken at 4 pm EST for cryptocurrency index calculation. Lukka’s methodology determines the fair value pricing of liquid cryptocurrency assets. “The LukkaPrime Fair Market Value Pricing uses a proprietary methodology to determine the primary exchange of each digital asset at any given time, which in turn determines that asset’s fair market value,” S&P said in the FAQs of the indices.

Related article | Always On: Bitcoin To Surpass S&P 500 Trading Time Within Two Years

Featured image from Pixabay, Charts from TradingView.com.

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